Abstract

The impact of schooling, an observable signal, on wages decreases as the employers “publicly” learn about the workers’ ability from their experience. This symmetric employer learning hypothesis is empirically questioned by, first, the asymmetry in learning of the current and the potential employers, and second, the complementarity between schooling and work experience that could enshroud learning effect. A microanalysis of the Japanese steel industry shows that, (1) experience before entering into long-term employment is complementary to schooling, and (2) the employer learning effect dominates the complementarity effect after entering into long-term employment; the internal labor market facilitates the employer learning.

Beaudry, Paul and John DiNardo, “The effect of implicit contracts on the movement of wages over the business cycle: Evidence from micro data,” The Journal of Political
Economy, August 1991, 99 (4), 665–688.

Bedard, Kelly, “Human capital versus signaling models: University access and high school dropouts,” The Journal of Political Economy, August 2001, 109 (4), 749–775.

Belman, Dale and John S. Heywood, “Sheepskin effects in the returns to education: An examination of women and minorities,” The Review of Economics and Statistics, November 1991, 73 (4), 720–724.

Bollinger, Christopher and Barry T. Hirsch, “Match bias from earnings imputation in the Current Population Survey: The case of imperfect matching,” Journal of Labor Economics,
December 2006, 24 (3), 483–519.

Caponi, Vincenz and Miana Plesca, “Post-secondary education in Canada: Can ability bias explain the earnings gap between college and university graduates?,” Canadian Journal
of Economics, July 2009, 42 (3), 1100–1131.

Card, David and Alan B. Krueger, “Does school quality matter?: Returns to education and the characterization of public schools in the United States,” The Journal of Political Economy, February 1992, 100 (1), 1–40.

Clark, Melissa A. and David A. Jaeger, “Natives, the foreign-born and high school equivalents: New evidence on the returns to the GED,” Journal of Population Economics,
October 2006, 19 (4), 769–793.

Dale, Stacy Berg and Alan B. Krueger, “Estimating the payoff to attending a more selecctive college: An application of selection on observables and unobservables,” The Quaterly Journal of Economics, November 2002, 117 (4), 1491–1527.

Hashimoto, Masanori and John Raisian, “Employment tenure and earnings profiles in Japan and the United States,” The American Economic Review, September 1985, 75 (4), 721–
735.

Hersch, Joni, “Profiling the new immigrant worker: The effects of skin color and height,” Journal of Labor Economics, April 2008, 26 (2), 345–386.

Heywood, John S., “How widespread are sheepskin returns to education in the U.S.?,” Economics of Education Review, September 1994, 13 (3), 227–234.

Higuchi, Yoshio, “Effects of job training and productivity growth on retention of male and female workers in Japan,” in Toshiaki Tachibanaki, ed., Labour market and economic
performance: Europe, Japan and the USA, St. Martin’s Press New York 1994, pp. 155–182.

Hungerford, Thomas and Gary Solon, “Sheepskin effects in the returns to education,” The Review of Economics and Statistics, February 1987, 69 (1), 175–177.

Ishikawa, Tsuneo, Income and wealth, Oxford: Oxford University Press, 2001.

Jaeger, David A. and Marianne E. Page, “Degrees matter: New evidence on sheepskin effects in the returns to education,” The Review of Economics and Statistics, November 1996, 78 (4), 733–740.

Jensen, Robert, “The (perceived) returns to education and the demand for schooling,” The Quarterly Journal of Economics, 2010, 125 (2).

Katz, Lawrence F. and Ana L. Revenga, “Changes in the structure of wages: The United States vs Japan,” Journal of the Japanese and International Economies, December 1989, 3 (4), 522–553.

Mincer, Jacob and Yoshio Higuchi, “Wage structure and labor turnover in the United States and Japan,” Journal of the Japanese and International Economies, June 1988, 2 (2),
97–133.

Moriguchi, Chiaki, “Implicit contracts, the Great Depression, and institutional change: A comparative analysis of U.S. and Japanese employment relations, 1920-1940,” The Journal of Economic History, September 2003, 63 (3), 625–665.

M¨ unich, Daniel, Jan Svejnar, and Katherine Terrell, “Returns to human capital under communist
wage grid and during the transition to a market economy,” The Review of Economics and Statistics, February 2005a, 87 (1), 100–123.

Nakamura, Naofumi, “Sengo Kamaishi seitetsujo ni okeru jukuren no saihen: hozen shokuba no jirei (From apprenticeships to firm-specific skills: a case of the maintenance workshop in the post-war Kamaishi Steel Works),” Shakai Kagaku Kenkyu (The Journal of Social
Science), March 2010, 61 (5-6), 3–26. Institute of Social Science, The University of Tokyo.

Novack, David E. and Richard Perlman, “The structure of wages in the American iron and steel industry, 1860-1890,” The Journal of Economic History, September 1962, 22 (3),
334–347.

Odaka, Konosuke, “The dual strucutre of the Japanese economy,” in Takafusa Nakamura and Konosuke Odaka, eds., The economic history of Japan: 1600-1990, volume 3: Economic
history of Japan 1914-1955: A dual strucutre, Oxford University Press New York 2003, pp. 111–136.

Ohkusa, Yasushi and Souichi Ohta, “An empricial study of the wage-tenure profile in Japanese manufacturing,” Journal of the Japanese and International Economies, June 1994, 8 (2), 173–203.

Oleopoulos, Philip, “Estimating average and local average treatment effects of education when compulsory schooling laws really matter,” The American Economic Review, March
2005, 96 (1), 152–175.

Ono, Hiroshi, “Lifetime employment in Japan: Concepts and measurements,” Journal of the Japanese and International Economies, March 2010, 24 (1), 1–27.

Oyer, Paul, “Ability and employer learning: Evidence from the economist labor market,” Journal of the Japanese and International Economies, June 2008, 22 (2), 268–289.

Parent, Daniel, “Industry-specific capital and the wage profile: Evidence from the National Longitudinal
Survey of Youth and the Panel Study of Income Dynamics,” Journal of Labor Economics, April 2000, 18 (2), 306–323.

Park, Heum Jin, “Estimation of sheepskin effects using the old and the new measures of educational attainment in the Current Population Survey,” Economics Letters, February
1999, 62 (2), 237–240.

Ueshima, Yasuhiro, “Why wages equalized in the high-speed growth era: Japanese manufacturing, 1961-1969,” Journal of the Japanese and International Economies, March 2003,
17 (1), 33–54.

Ueshima, Yasuhiro, Takuji Funaba, and Takenori Inoki, “New technology and demand for educated workers: The experience of Japanese manufacturing in the ear of high-speed growth,”
Journal of the Japanese and International Economies, March 2006, 20 (1), 50–76.

Umezaki, Osamu, “Keiei gorika to tokai tenshutsu: 1960 nendai ni okeru naibu rodo shijo keisei no ichi sokumen (Restructuring of Kamaishi Iron and SteelWorks and the transfer of emoloyees to Tokai Iron and Steel Works: an analysis of the internal labour market formation in the 1960s),” Shakai Kagaku Kenkyu (The Journal of Social Science), March 2010, 61 (5-6), 27–54. Institute of Social Science, The University of Tokyo.